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What President must do to realise Big Four pillars plan

Wednesday February 14 2018

In order to realise the ambitions behind the Big Four pillar, President Kenyatta must must start by accepting that his Cabinet and principal secretaries have not done very well in implementing flagship projects. GRAPHIC | NATION MEDIA GROUP

In Summary

We all know the predicament that befell projects such as the laptop project, Galana, the Konza Silicon Valley and the road annuity project.

It will require a complete paradigm shift in the mind sets of those who make the budget and design our expenditure programmes.

The government must demonstrate that there is adequate fiscal space for the Big Four plan.

My initial reaction to President Uhuru Kenyatta’s Big Four pillars for economic renewal was to dismiss the whole strategy as lacking in ambition.

I argued that what this country needs is a proper plan to turbocharge the economy, snap it out of stagnation, and put it at a level where we can go back to the high growth rates we witnessed in the early years of the Mwai Kibaki administration.

In the spirit of constructive criticism, I want to suggest what President Kenyatta must to do realise the ambitions behind the four pillars.

First, he must start by accepting that his Cabinet and principal secretaries have not done very well in implementing flagship projects.

In his first term, many flagship projects were implemented poorly.

PROJECTS

We all know the predicament that befell projects such as the laptop project, the 5000Mw project, the one-million acres under irrigation project in Galana, the Konza Silicon Valley and the road annuity project.

Implementation of ideas supported and endorsed by the president also suffered major setbacks.

Had the recommendations of the President’s blue ribbon task force on parastatal reform been implemented according to plan, we would by now be having a sovereign wealth fund. We would have consolidated our financial services regulators by now.

We would have consolidated all the state-owned banks and established a functioning international financial centre.

We would have by now established a Biashara bank as a single consolidated state-owned SME agency.

INVESTMENT CORPORATION

Most important, we were to establish a Government Investment Corporation to own shares in commercial parastatals and act as the public’s investment banker. I could go on and on this narrative of five years of well-intentioned failures.

If approach to service delivery is not changed, and if institutions charged with implementing projects are not radically reformed, the President’s plans may not see the light of day.

Secondly, for the Big Four plan to get public support, and be viewed a credible plan, the government must demonstrate that there is adequate fiscal space for the plan.

PARADIGM SHIFT

Where will the money to fund the plan come from?

It will require a complete paradigm shift in the mind sets of those who make the budget and design our expenditure programmes.

I say so because for the plan to work, massive budgetary re allocations will have to be effected to ensure that spending is aligned with the Big Four. It will not be easy because the structure of our budget is so stiff to allow any major re orientation.

Our budget has too many fixed allocations, with wages, pensions, and debt services consuming a disproportionate share of taxes.

POLITICAL WILL

Secondly, you have the problem of lack of sufficient political will to transfer resources from budgetary allocations to what have been historically treated as the sacred cows of our budget.

I refer to the big-spending and politically-favoured government departments such Defence, the National Police Service, National Intelligence Service, the Ministry of Energy and ministry Transport and Communications and infrastructure.

It seems that budgetary allocations of the sacred cows do not change regardless of the regime in power. This is because these usually implement projects that have big opportunities for rent-seeking.

To appreciate the struggle which budget makers are going through just to shift allocations to the Big Four, grab a copy of the recently published Budget Strategy Paper.

ALLOCATIONS

Even with the high political stakes invested in the plan, you will see in the document that budget makers are not able to shift budgetary allocations to align to them in any significant way.

You will discover that virtually all votes for ministries which will be implementing the plans have smaller allocations than in the previous financial year.

Clearly, fiscal space was not top of the mind of the designers of the Big Four.

We must go back to the basic questions to assess whether the pillars have a good chance of being implemented successfully.

What will it cost us to finance the Big Four plan annually? Which ministry’s budget should we cut to free the resources we need and to accommodate the expenditure on the big 4 priorities?

Where are the flagship projects under the Big For?

The President might be forced to establish a completely new implementation and monitoring agency with the powers and influence across the civil service bureaucracy.

When they decided to implement major flagship projects, the Malaysians established an entity known as ‘permandu’ to do the job.